Boosting Customer Loyalty - How it's done

Customer retention is imminently important for organization success as the cost of acquiring a new customer is greater than holding onto an old customer. It is obvious that the most profitable customers in any organization account for almost 30% of a firms profitability. Looking at these staggering statistics it is no wonder that customer retention is high up on the list of organization essentials. The customer centric strategy of the decade - CRM achieves customer loyalty with ease. This is because in CRM customer relationship is the focal point of success.

Types of Customer Retention Programs:Discount Programs

In this type of program the customer receives a discount when he makes a repeated purchase. This is profitable as it encourages customers to keep buying as they want to avail of the lower price.

Card Programs

In this type of program the customer is provided with a swipe card which he can use while purchasing and avail of any discount or benefit.

Loyalty Programs

Here customers are given the option of gaining points when they make a purchase. These points can be redeemed and exchanged for gifts or further discount coupons. This also serves as a stimulator for customer retention.

Benefits of Customer Retention Programs

• They permits the collation of important customer data
• They allow the usage of this data in the understanding and dealing of customers
• The data collected from customer retention programs is often used while making valuable customer decisions.
• They assist in making the customer feel special
• They boost customer service and thereby increases customer loyalty

Pitfalls of Customer Retention Programs

The main inhibition in this area is the cost factor. Customer Retention programs can often involve huge costs to the organization and therefore most firms are reluctant to embark on this. In this respect it is important to focus on the possible returns rather than the cost involved as customer retention is a direct stimulator for profitability and growth.

How to Get the Best out of Customer Retention Programs:

• Every organization needs to ask several questions like:
  
  
  • How does it measure success?
  • Does the business processes support the CRM customer retention programs?
  • Can employee support be secured for customer retention?
  • Can the organization meet the required costs involved?
  
  
• CRM customer retention support should be obtained throughout the organization right from the CEO.
  
  
• Employee support should be obtained. It is almost next to impossible to try and adopt customer retention programs when there are employees who are working against this. The importance of this ideology to the entire organization and how it will ultimately serve to benefit every employee needs to be taught. It is imperative to secure this employee support right before embarking on any CRM program.
  
  
• It is important not to contact customers more times than required or this may have the opposite affect. Untoward annoyance of the customer should be avoided.
  
  
• It is important to treat different customers differently. In this respect the customer data that has been collated needs to be used. Employees need to exercise the right caution and make customer decisions based on this data.

Since in CRM customer relationship is focused on, organizations should strive to implement it and avail of its benefits. CRM reviews evidence the profound impact CRM has on customer loyalty. Customer retention is the key to success and efforts should be made to harness it.

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